REG - Marks and Spencer Gp - Christmas 2023/2024 Trading

Marks and SpencerAnnouncement

11/01/2024 07:00

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RNS Number : 3201Z  Marks and Spencer Group PLC  11 January 2024

 

MARKS AND SPENCER GROUP PLC

CHRISTMAS TRADING - 13 WEEKS TO 30 DECEMBER 2023

M&S SUSTAINS STRONG SALES MOMENTUM

 Third quarter sales growth, constant currency  £m     Total Sales %  Like-for-Like %
 Food                                           2,332  10.5           9.9
 Clothing & Home                                1,236  4.8            4.8
 Total UK                                       3,568  8.5            8.1
 International                                  288    (6.4)
 Group                                          3,856  7.2

Ocado Retail sales are not included in this statement and are reported
separately by Ocado Group plc.

Stuart Machin, Chief Executive said: "Our strategy to reshape M&S for
growth has enabled sustained sales momentum across Food and Clothing &
Home over the Christmas period. Thank you to our customers for shopping with
us and to our colleagues who worked incredibly hard.

 

In Food, we led the market on volume growth every month with a c.7% increase
across the quarter, and served more customers than ever before. Core
categories grew strongly and renewal stores, which cater to larger basket
shops, performed particularly well, as more customers looked to us for more of
their full shop.

 

In Clothing & Home, we delivered a good performance with sales growing
ahead of the market and less stock going into sale. Womenswear has been the
standout, growing volume and value significantly ahead of the market.

 

Underpinning the strong performance in both businesses is our commitment to
trusted value - unbeatable M&S quality at the best possible price. In
Food, we inflated below the market, with quality perception increasing
further. In Clothing & Home, style perception continued to improve and we
maintained our lead on quality and value, delivering an increase in full price
sales mix and our highest full price market share for over a decade.

 

We enter 2024 with a spring in our step, but clear eyed on the near-term
challenges. We are determined to deliver our objective of driving 1% growth in
market share in both businesses and to up the pace of our transformation:
keeping a relentless focus on trusted value; accelerating our store rotation
and renewal plans; doubling down on our supply chain programmes to improve
availability and lower costs; and resetting our data, digital and technology
strategy to unlock benefits in future years.

 

Our vision is to be the most trusted retailer, doing the right thing for our
customers, with quality products at the heart of everything we do, and we are
just at the beginning of what we can achieve. Lots done, lots to do, lots of
opportunity ahead." 

 

Food sales increased 10.5%, with LFL sales up 9.9%. M&S was the top
performing grocer in volume growth terms(1) over the Christmas period and the
quarter, with growth of c.7%, as we served more customers in the period.
Supply chain improvements helped to drive better availability year-on-year,
although there is more to do. Categories such as meat, poultry, produce,
grocery and in-store bakery delivered strong growth, supported by our
programme of innovation and quality upgrades. 'Remarksable' value sales grew
c.18% as we continue to invest in trusted value.

Clothing & Home sales increased 4.8%, with LFL sales also up 4.8% driven
by growth in average selling price, partly a result of reduced promotions
year-on-year. Market share increased(2), led by the strong performance of
womenswear, supported by improved customer perceptions of style, quality and
value. Store sales increased 2.0%, with new full line stores performing ahead
of plan. Online sales grew 10.9%, with improved carrier service levels
compared with last year and strong demand for click and collect. Knitwear,
denim, and top of range Autograph lines performed well. Full price sales mix
improved and stock into sale reduced 6% year-on-year. With a deeper initial
cut in line with our objective of a shorter clearance sale, sell through rates
have been encouraging.

International sales were down 6.4%, largely driven by the planned timing of
franchise shipments in the Middle East and Asia and more challenging market
conditions in India. We are reviewing our priorities, working with our
franchise partners, to improve performance.

Outlook. As we enter the new year and FY25, expectations for economic growth
remain uncertain, with consumer and geopolitical risks. We also face
additional cost increases from higher than anticipated wage and business rates
related cost inflation. Nevertheless, the strong Christmas trading performance
provides confidence that the results for the year will be consistent with
market expectations.

Employee share save scheme. We are very pleased that with improved trading
performance and the resultant increase in the share price, over 9,200
colleagues - the majority being customer service assistants - are expected to
benefit from the vesting of the 2020 employee share save scheme on 1 February
2024.  A colleague saving a typical £150 per month in the scheme will gain
over £10,000. To satisfy this, M&S applied to issue 70m new ordinary
shares on 14 December 2023.

For further information, please contact:

Investor Relations: Fraser Ramzan: +44 (0) 7554 227 758; Sandeep Dasgupta: +44
(0) 7868 735 381

Corporate Press Office: +44 (0)20 8718 1919

1.     Kantar FMCG Purchase Panel; Total grocery 4 and 12 weeks ended 24
December 2023

2.     Kantar Fashion Clothing & Footwear 12 weeks ended 10 December
2023

 

- Ends -

Important Notice:

Statements made in this announcement that look forward in time or that express
management's beliefs, expectations or estimates regarding future occurrences
and prospects are "forward-looking statements" within the meaning of the
United States federal securities laws. These forward-looking statements
reflect Marks & Spencer's current expectations concerning future events
and actual results may differ materially from current expectations or
historical results. Any forward-looking statements are subject to various
risks and uncertainties, including, but not limited to, failure by Marks &
Spencer to predict accurately customer preferences; decline in the demand for
products offered by Marks & Spencer; competitive influences; changes in
levels of store traffic or consumer spending habits; effectiveness of Marks
& Spencer's brand awareness and marketing programmes; general economic
conditions including, but not limited to, those related to the Covid-19
pandemic or a downturn in the retail or financial services industries; acts of
war or terrorism worldwide; work stoppages, slowdowns or strikes; and changes
in financial and equity markets. For further information regarding risks to
Marks & Spencer's business, please consult the risk management section of
the 2023 Annual Report (pages 56-65).

The forward-looking statements contained in this document speak only as of the
date of this announcement, and Marks & Spencer does not undertake to
update any forward-looking statement to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.

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